Tether, the issuer of the USDT stablecoin, has blocked 32 crypto wallet addresses in Israel and Ukraine, collectively holding $873,118. Tether, with a massive market cap of $83.6 billion, is now collaborating with Israel’s National Bureau for Counter-Terror Financing (NBCTF) to combat the growing threat of cryptocurrency-funded terrorism and warfare.
Response to Recent Tragedy
This decision comes in response to a recent tragedy, the Hamas attack on Israel, which resulted in the loss of 1,300 lives. Israeli police, with support from Binance, successfully seized crypto accounts used by Hamas for receiving funding through social media channels. The funds were subsequently transferred to the Israeli government treasury.
Also read: Hamas Raised Over $40 Million in Crypto From 2021 to 2023
A Tether spokesperson explained the challenge they face, stating, “Cryptocurrency operates mostly outside of the traditional financial system and wallet addresses are pseudonymous, which makes those behind transactions difficult to track.” However, Tether is committed to preventing cryptocurrency from falling into the wrong hands and is proactively blocking suspicious wallet addresses.
TRM Labs, a U.S. blockchain analysis firm, reported that Tether was the preferred currency for terrorist financing. In 2022, they registered a staggering 240% increase in the use of Tether among the terrorist-financing entities they track, dwarfing the almost 80% rise in Bitcoin usage for the same purpose.
Freezes in Israel and Ukraine
Tether took its first step in freezing USDT funds in Israel on March 16, 2023. The first Ukrainian-associated freeze occurred in 2021. However, Tether has not disclosed information regarding the owners of these wallet addresses or their activities. It also has not provided a breakdown between Ukraine-related and Israel-related addresses.
In a parallel development, Israeli police, in collaboration with Binance, seized crypto accounts belonging to Hamas groups, which were used to solicit donations following their recent attacks on Israel. The funds were subsequently transferred to the Israeli government treasury. A police spokesperson commented on the operation, saying,
“As the war broke out, Hamas launched a fundraising campaign on social networks, asking the public to deposit crypto coins into its account. The cyber and foreign exchange unit worked immediately to locate and freeze the accounts, assisted by the Binance crypto exchange.”
The fight against crypto-funded terrorism and warfare is an effort that necessitates global cooperation. Tether’s move to block suspicious wallet addresses is just one step in a broader mission to ensure that cryptocurrency is not misused for illicit purposes, particularly in regions affected by conflict.